SM Ent blames TVXQ & Super Junior for profit loss; Experts not convinced by SM

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Experts are not convinced by SM Entertainment’s explanation that TVXQ and Super Junior are to blame for less than expected profits. Is SM hiding something? 

Stock prices have dropped after SM Entertainment submitted it’s earnings for the third quarter. According to the report, SM Entertainment had earned 11.7 billion WON ($10.8 million USD) in the quarter while stock analysts had predicted 23 billion WON ($21.1 million USD) for the company.

Although profits for the third quarter this year were higher than last year’s, the stock market reacted quickly with stock prices for SM Ent. dropping after the announcement. One stock analyst said that investors were “panicking” from the announcement and that there has been “telephone calls without break”.

“We are not able to find out exactly why SM had such earning shock at the moment.” The analyst said.

While it has been reported that SM Entertainment has blamed big concert expenses for TVXQ and Super Junior, analysts are not convinced by the explanation and said “There must have been some [big] problems in the company because it is just too much lower than expected.”

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Analysts explained that TVXQ and Super Junior concerts used to be highly profitable, especially in Japan where SM Entertainment is able to sell up to a million tickets.

Super Junior’s Singapore concert this year reportedly cost $2 million USD while TVXQ was able to make over $12.3 million USD alone from concert DVDs this year in Japan.

Could the stock analysts be right? Could SM Entertainment be trying to hide something? Let us know in the comments below.

Following the announcement, stock prices for JYP and YG Entertainment also fell.

Source: Naver Image: 24-7 KPOP


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